Identifier
Created
Classification
Origin
07SARAJEVO1209
2007-06-01 14:05:00
CONFIDENTIAL
Embassy Sarajevo
Cable title:  

BOSNIA: DEFENSE PROPERTY RESOLUTION LAGS, SETS

Tags:  PREL PGOV MARR BK 
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VZCZCXYZ0001
PP RUEHWEB

DE RUEHVJ #1209/01 1521405
ZNY CCCCC ZZH
P 011405Z JUN 07
FM AMEMBASSY SARAJEVO
TO RUEHC/SECSTATE WASHDC PRIORITY 6353
INFO RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RUFGCCM/USEUCOM STUTTGART GE PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEHNO/USMISSION USNATO PRIORITY 0136
RHEHNSC/NSC WASHDC PRIORITY
C O N F I D E N T I A L SARAJEVO 001209 

SIPDIS

SIPDIS

SECDEF FOR FATA AND BEIN, DEPT FOR EUR (DICARLO),D
(SMITH),P (BAME),EUR/SCE (HOH, SAINZ, FOOKS),PM/WRA, AND
EUR/RPM (BROTZEN),NSC FOR BRAUN, USNATO FOR REID,
UNDERWOOD, SHAFFER

E.O. 12958: DECL: 06/01/2017
TAGS: PREL PGOV MARR BK
SUBJECT: BOSNIA: DEFENSE PROPERTY RESOLUTION LAGS, SETS
STAGE FOR DISPUTE OVER SA/LW AND AMMUNITION


Classified By: Acting DCM Mike Reinert for reasons 1.4 (b) and (d)

C O N F I D E N T I A L SARAJEVO 001209

SIPDIS

SIPDIS

SECDEF FOR FATA AND BEIN, DEPT FOR EUR (DICARLO),D
(SMITH),P (BAME),EUR/SCE (HOH, SAINZ, FOOKS),PM/WRA, AND
EUR/RPM (BROTZEN),NSC FOR BRAUN, USNATO FOR REID,
UNDERWOOD, SHAFFER

E.O. 12958: DECL: 06/01/2017
TAGS: PREL PGOV MARR BK
SUBJECT: BOSNIA: DEFENSE PROPERTY RESOLUTION LAGS, SETS
STAGE FOR DISPUTE OVER SA/LW AND AMMUNITION


Classified By: Acting DCM Mike Reinert for reasons 1.4 (b) and (d)


1. (C) Summary. Over a year behind schedule, the Bosnian
Ministry of Defense (MOD) submitted a plan to the Council of
Ministers for the resolution of defense property issues
between the entities and the state. The plan, required by
the 2005 Law on Defense, loosely dictates a transfer
arrangement for defense property requested by the state-level
Ministry of Defense. The Council of Ministers and entity
governments must now approve the deal, but scheduled
negotiations have been delayed. The long-standing failure to
conclude the property issues has also caused significant
delays in resolving the status of the large amounts of
surplus small arms and light weapons (SA/LW) and ammunition
which remain a significant safety and proliferation threat.
We anticipate that upon resolution of the property issues, we
will be brought into a contentious debate between the MOD and
some of our international partners as to whether the surplus
material should be sold, donated or destroyed. End Summary.


2. (SBU) Background. The 2005 Law on Defense, which formally
established the state-level Ministry of Defense and single
Armed Forces, set out broad provisions for the transfer of
defense property and articles from the defunct entity
Ministries of Defense and Armed Forces to the new state-level
institutions. Under Section D of the Defense Law, the
state-level Ministry of Defense was to submit a list of both
"immovable" (land, physical structures) and "movable"
(weapons, ammunition, vehicles, etc.) defense property
necessary for current and future defense needs. From this
list, the state and entities were required to work out a
legal transfer agreement. Articles 70 and 71 expressly state
the that transfer was to be concluded by January 1, 2006, and
that the state-level Ministry of Defense and Armed Forces

would assume all rights of possession from that date. In
order to block the entities from liquidating the defense
property before they agreed to transfer it to the state, the
Law of Defense also placed a moratorium on the sale of
defense items until the property issues were resolved. End
background.


3. (SBU) Due to a host of political and logistical reasons,
the Ministry of Defense grossly missed the deadline for
assuming possession of the defense articles. Over the past
year, various proposals governing a transfer were discussed
and floated through the Ministry, NATO HQ and OHR. In one of
her last acts before transferring authority to incoming
Defense Minister Selmo Cikotic, the former Acting Defense
Minister Marina Pendes submitted a plan to the Council of
Ministers for the transfer of the property in April. As
required by the defense law, the MOD's plan explicitly
specified which "immovable" items were required for future
defense purposes and therefore subject to state transfer. It
also included provisions for the complete transfer of all
arms and ammunition to the state. Both OHR and NATO HQ have
told us that the MOD's plan represents the best possible
solution to the property issues given the current political
environment.


4. (C) Prime Minister Nikola Spiric pledged to use the MOD's
plan as the basis for negotiations between his office and the
entity governments to develop a final transfer agreement.
Spiric has pledged to chair, but has yet to convene,
discussions on the issue with the entity prime ministers and
NATO HQ. This is due in no small part to the host of other
pressing political matters in Bosnia, but also reflects the
lack of incentives that either entity has to transfer both
movable and immovable defense property to the state. On the
Republika Srpska side in particular, we have heard grumblings
that any property transfer would deprive the RS of proceeds
of future sales of the items. Though there has been no
formal assessment of the monetary value of immovable and
movable defense items, it is certainly high and any sale of
the items would net a significant return. Senior
Bosnian-Serb officials at the state-level and in Banja Luka
told us that RS Prime Minister Dodik will hold off on
reaching an agreement on the property transfers until he
receives guarantees that a significant amount of the proceeds
from any sales of the items once the moratorium is lifted
will go back to RS government coffers.


5. (C) Once the property issues are resolved, we anticipate
that the question of whether the MOD will sell/donate or
destroy surplus arms and ammunition will become contentious.
A recent survey by the Defense Threat Reduction Agency (DTRA)
found that there is well over 15,000 tons of surplus
ammunition in Bosnia. Several thousand tons of this
ammunition is unstable due to its age, but approximately
10,000 tons is usable. Both the UNDP and OSCE Pol-Mil office
here have made clear that they will push the Bosnian
government to maintain the moratorium on the sale of defense
items after the resolution of property issues and destroy all
surplus items. Representatives of some European embassies
have also echoed this view point. For their part, senior MOD
officials have told us that they hope to sell or donate most
of the surplus items. According to the officials, the
proceeds of the sales could be used by the ministry to cover
funding gaps in maintenance of military equipment and upkeep
of storage facilities. The MOD officials also point out that
it would take decades to destroy all the surplus arms and
ammunition even if Bosnia's domestic capacity for such
activities were increased, presenting a long-term safety
threat to communities near the storage areas and raising
concerns over the trafficking and proliferation of items from
the stockpiles. (Comment: This is generally accurate.
Without a major upgrade of the capacity of Bosnia's two
demilitarization sites in Zenica and Doboj, it would be
impossible to resolve the issue of surplus arms and
ammunition through destruction alone. End Comment.)


6. (C) Comment. Defense Minister Cikotic has already
signaled he will not push to renew the moratorium on the sale
of defense items after the property issues are resolved,
noting that the moratorium was put in place for a distinct
purpose for encouraging the resolution of the property issues
and once its rationale is removed, there is no need to
continue to deprive Bosnia of needed resources that could be
gained from the sale of the items. The Deputy Minister of
Defense and other senior MOD officials have already started
to lobby us to back the government and ministry if it seeks
to lift the moratorium. The MOD has a strong case that
Bosnia can be trusted to adhere to all international export
standards (we in fact helped create and stand-up their export
control regime) and should not be unfairly held to a standard
that their European neighbors do not observe. Some MOD
officials have also told us that lifting the moratorium would
also allow them to donate or gift more items to Afghanistan
and Iraq. At this point, the debate remains academic, but
we do need to begin thinking in advance how we will respond
to a formal MOD request to support their position once the
property issues are resolved.
MCELHANEY